The purpose of this study is to determine if a new investigational drug which opposes the action of glucagon, a hormone which causes the liver to produce glucose when blood sugars are low, can safely help decrease fasting blood sugars when used along with insulin in people with type 2 diabetes mellitus, whose blood sugars are not adequately controlled with insulin and diet. This is a ten week study in which patients receive either a placebo or the real drug for three weeks, followed by a two week period when the patients only take their insulin, and then a three week period when the patient receive the alternative treatment. It is a double-blinded study. Patients are asked to check their blood sugar three times per day and to record all low blood sugars that they have. Patients are taught how to prepare their medication in hot chocolate and are asked to take it before breakfast and before bedtime. They continue taking their insulin as they did prior to the study with no insulin adjustments. After taking medication for twenty days, the patient is admitted to the hospital for extensive blood testing to measure glucose, glucagon, and levels of study medication. This process is repeated after the two week washout period. To monitor for safety the patients make weekly or biweekly visits, and have periodic lab tests, EKGs, and physical exams.